finance division briefing paper ... - new york city council€¦ · bic is a revenue-generating...

Finance Division Briefing Paper Business Integrity Commission

Finance Division Preston Niblack, Director Jeffrey Rodus, First Deputy Director

Hearing on the Fiscal 2014 Preliminary Budget & the Fiscal 2013 Preliminary Mayor’s Management Report

Business Integrity Commission

March 6, 2012 Nathan Toth, Deputy Director Amy Stokes, Legislative Financial Analyst

THE COUNCIL OF THE CITY OF NEW YORK

Hon. Christine C. Quinn Speaker of the Council

Hon. Daniel Garodnick

Chair, Committee on Consumer Affairs

08 Fall


Page i

Table of Contents

Business Integrity Commission Overview ................................................................................................................. 1

Fiscal 2013 Preliminary Plan Highlights .................................................................................................................... 1

BIC Financial Summary ..................................................................................................................................................... 3

Revenue Budget ................................................................................................................................................................... 4

Units of Appropriation ...................................................................................................................................................... 5

Appendix A ............................................................................................................................................................................. 7

Budget Actions in the November and February Plans ..................................................................................... 7

Appendix B ............................................................................................................................................................................. 8

Contract Budget .............................................................................................................................................................. 8


Page 1

Business Integrity Commission Overview

The Business Integrity Commission (BIC) regulates and licenses the trade waste/commercial carting industry and the wholesalers and businesses operating in the City's public wholesale markets, and is responsible for processing applications and renewals. Through background investigations of license and registration applications, the establishment of standards for services and conduct of business, and criminal investigations, BIC carries out its mandate to make certain that these industries and businesses remain free from the influence of organized crime. BIC is responsible for creating an honest field for competition in the regulated industries so that customers do not face threats, violence, rackets, or anticompetitive practices. The Commission also has the authority to regulate the shipboard gambling industry.

Fiscal 2013 Preliminary Plan Highlights

2012 2013 2013 2014 *Difference

Dollars in Thousands Actual Adopted Jan. Plan Jan. Plan 2013 - 2014

Personal Services $4,956 $5,075 $5,128 $5,075 $0

Other Than Personal Services 1,838 2,044 2,270 1,898 (147)

Total $6,794 $7,119 $7,398 $6,973 ($147)

*The difference of Fiscal 2013 Adopted compared to Fiscal 2014 February Plan funding.

BIC’s Fiscal 2014 Preliminary Budget is approximately $7.0 million, which is a net decrease of $147,000 when compared to the Fiscal 2013 Adopted Budget. This 2.1% decrease is primarily due to a decrease in other than personal services, including the renegotiation of a current lease, funds received through the agency’s participation in the federal asset forfeiture program, and the end of state funding for records upgrades like document image scanning. These savings offset additional contractor services for a project manager to oversee the agency’s database consolidation project, which modernizes the system for better case management tracking. This cost the agency an additional $115,000 in Fiscal 2013. BIC also plans to implement Revenue PEGs (Program to Eliminate the Gap), which allows an agency to reduce its City tax-levy budget in anticipation of additional revenue. Some highlights of this program are:

Additional Licensing and Photo ID Revenue. BIC will realize additional revenue from licensing medical and scrap metal waste metal businesses. The agency began noticing an increase in non-licensed companies entering into the medical and scraps metal waste businesses and is beginning efforts to reach out to firms to obtain licenses and registrations. Fiscal 2014 will also generate additional revenue from market fees. This will result in additional savings of $20,000 in Fiscal 2013 and $50,000 in Fiscal 2014.

Additional Revenue from Enforcement Initiatives. BIC will generate additional revenue from various new enforcement initiatives. Some of these new efforts include implementing a campaign to educate the industry on waste licenses for items such as scrap metal and cardboard, staff training for investigators on new companies that might be engaging in


Page 2

illegal activity, and taking legal action against firms under the nuisance laws as a way to stop illegal activity. This will result in savings of $433,000 in Fiscal 2013 and $383,000 in Fiscal 2014.


Page 3

BIC Financial Summary

2012 2013 2013 2014 *Difference


Budget by Program Area

Personal Services $4,956 $5,075 $5,128 $5,075 $0

Other Than Personal Services 1,838 2,044 2,270 1,898 (147)

TOTAL $6,794 $7,119 $7,398 $6,973 ($147)

Funding

City Funds $7,119 $7,167 $6,973 ($147)

State 0 75 0 0

Federal - Other 0 157 0 0

TOTAL $7,119 $7,398 $6,973 ($147)

Positions

Full-Time Positions - Civilian 71 80 81 80 0

TOTAL 71 80 81 80 0

*The difference of Fiscal 2013 Adopted compared to Fiscal 2014 January Plan funding.


Page 4

Revenue Budget

Agency Revenue Sources FY13 Adopted

Budget FY13

Modified FY14 Preliminary

Budget

License, Permit & Franchises $3,756 $3,756 $3,760

Charges for Services 688 688 577

Fines and Forfeitures 1,500 1,500 1,883

Federal Grants - Categorical 0 157 0

State Grants - Categorical 0 75 0

TOTAL $5,944 $6,176 $6,221

BIC is a revenue-generating agency. Revenues consist of licenses for private carters, investigation and wholesale market fees, and administrative violation fines. Approximately $3.8 million, or 60.4% of total revenue will be from licenses, permits, and franchises in the Fiscal 2014 Preliminary Plan. This source of revenue is generated from private charter licenses, which has a cost savings of approximately $3.8 million in both Fiscal 2013 and Fiscal 2014. Additionally, approximately $1.9 million, or 30.3% of total revenue will be generated through fines and forfeitures. These are primarily administrative violations, which are a result of non-response or inaccurate responding from waste companies.


Page 5

Units of Appropriation

2012 2013 2013 2014 *Difference


Spending

Personal Services

Full Time Salaried $4,510 $4,834 $4,820 $4,807 ($27)

Full Time Salaried - Uniformed 1 0 0 0 0

Other Salaried & Unsalaried 57 28 50 50 22

Additional Gross Pay 331 190 228 194 3

Overtime-Civilian 59 22 31 24 2

P.S Other (3) 0 0 0 0

Personal Services Subtotal $4,956 $5,075 $5,128 $5,075 $0

Other Than Personal Services

Supplies and Materials $109 $193 $162 $163 ($30)

Fixed and Misc Charges 0 0 1 0 0

Property and Equipment 49 29 100 26 (3)

Other Services and Charges 1,616 1,707 1,764 1,500 (207)

Contractual Services 64 115 243 209 94

Other Than Personal Services Subtotal $1,838 $2,044 $2,270 $1,898 ($147)

TOTAL $6,794 $7,119 $7,398 $6,973 ($147)

Funding

City Funds $7,119 $7,167 $6,973 ($147)

State 0 75 0 0

Federal - Other 0 157 0 0

TOTAL $7,119 $7,398 $6,973 ($147)

*The difference of Fiscal 2013 Adopted compared to Fiscal 2014 January Plan Funding.

The Fiscal 2014 Preliminary budget is approximately $7.0 million, which is $147,000 less than the Fiscal 2013 Adopted budget of about $7.1 million. This is primarily due to the decrease of $207,000 in Other Services and Charges, which includes the lease renegotiation and additional funds received through the agency’s participation in the federal asset forfeiture program.

The increase of $22,000 in Other Salaried & Unsalaried is additional compensation for a part-time employee who oversees the violations unit. These additional funds were adjusted from the Full Time Salaried line item.


Page 6

Performance Measures

FY 10 Actual

FY 11 Actual

FY 12 Actual

4-Month Actual FY 12

4-Month Actual FY 13

Violations issued to private waste haulers 1672 1280 1601 439 638

Violations issued - Other (not licensees or registrants) 996 581 271 34 138

Waste hauling background investigations completed 1289 1088 998 336 417

Total waste hauling applications denied (%) 3.7% 3.6% 3.6% 3.6% 3.6%

Waste hauling applications denied - license (%) 9.6% 9.3% 9.3% 9.2% 9.1%

Waste hauling applications denied - registration (%) 2.3% 2.2% 2.4% 2.3% 2.4%

Average time to approve waste hauling licenses (days) 184 155 175 169 141

Average time to approve waste hauling registrations (days) 127 99 112 92 116

Average age of pending waste hauling applications (days) 167 167 168 163 194

Waste hauling applications pending 336 363 419 321 194

Waste hauling licenses approved 133 95 103 49 53

Violations issued at public wholesale markets 417 345 323 129 55

Public wholesale market applications denied (%) 2.2% 1.9% 2.2% 2.5% 2.3%

Public wholesale market applications under long-term investigation (total) 26 26 14 24 14

Public wholesale market background investigations completed 265 397 726 157 200

Average time to approve public wholesale market registrations (days) 226 221 221 235 121

Public wholesale market registrations approved 114 80 50 7 22

BIC’s administrative improvements have led to some performance improvements. The number of waste hauling applications that are pending decreased approximately 39.6%, from 321 in Fiscal 2012 to 194 for the same four month period in Fiscal 2013. The average time to approve these applications also decreased 16.6% from Fiscal 2012 to Fiscal 2013. Background investigations conducted as part of all trade waste applications increased 24.1%. Additionally, over the first four months in Fiscal 2012 and Fiscal 2013, waste hauling licenses approved increased 8.2%. In the public wholesale markets sector, registrations approved increased 214.3% and the average time to approve registrations decreased 48.5%, when compared to the same reporting period in Fiscal 2013. Completed background investigations for public wholesale markets increase 27.4%, from 157 in Fiscal 2012 to 200 for the same period in Fiscal 2013.

The agency’s processing of licenses and registrations did experience some problems. The average time to approve waste hauling registrations increased 26.1%, from 92 days in Fiscal 2012 to 116 days in Fiscal 2013 over the same period. The average age of pending waste hauling applications increased 19.0%, from 163 days in the first four months of Fiscal 2012 to 194 days in Fiscal 2013 for the same period.

Regulatory compliance is also an important agency role in order to combat unlicensed activity. BIC issued 45.3% more violations to private waste haulers and 305.9% more violations for unlicensed activity, when compared to the same reporting period in Fiscal 2012. Alternatively, violations issued at public wholesale markets decreased 57.4%.


Page 7

Appendix A Budget Actions in the November and February Plans

Dollars in Thousands

FY 2013 FY 2014

City Non-City Total City Non-City Total

Agency Budget as of June 2013 Plan $7,119 $0 $7,119 $7,119 $0 $7,119

Program to Eliminate the Gap (PEGs)

Lease Savings $0 $0 ($172) ($172)

PS Accrual Savings (73) (73) - -

TOTAL, PEGs ($73) $0 ($73) ($172) $0 ($172)

New Needs

Lease Renewal Increase $0 $0 $25 $25

Project Manager- Database Consolidation 115 115 - -

TOTAL, New Needs $115 $0 $115 $25 $0 $25

Other Adjustments

BIC Asset Foreclosure Funds $0 $150 $150 $0 $0

PS Accruals PEG 5 - 5 -

Federal OT Reimbursement 6 6 -

SARA Grant FY 2013 75 75 -

TOTAL, Other Adjustments $5 $232 $237 $0 $0 $0

TOTAL, All Changes $47 $232 $279 ($147) $0 ($147)

BIC Budget as of January 2014 Plan $7,166 $232 $7,398 $6,972 $0 $6,972


Page 8

Appendix B Contract Budget

The New York City Charter mandates the preparation of a Contract Budget to identify expenditures for contractual services, which are defined as any technical, consultant, or personal service provided to the City by means of a contract. The Contract Budget is actually a subset of the Other Than Personal Services (OTPS) portion of the City’s Expense Budget. The Administration prepares a Contract Budget twice each fiscal year. In January, it is prepared with the Departmental Estimates, and in late April it is submitted to the Council with the Executive Budget.

Category Number Budgeted % of

BIC Total

Contractual Services General 6 $154,343 73.9%

Maint & Repair of Motor Vehicle Equipment 1 1,000 0.5%

Maint & Repair, General 1 1,000 0.5%

Office Equipment Maintenance 1 3,000 1.4%

Temporary Services 1 25,000 12.0%

Cleaning Services 1 2,400 1.1%

Professional Services: Other 1 22,000 10.5%

Preliminary Budget 12 $208,743 100.0%

finance division briefing paper ... - new york city council€¦ · bic is a revenue-generating...

Documents